Question : The formula for calculating Trade Payables Turnover Ratio is -
Option 1: Net Credit purchase / Average creditors
Option 2: Net Credit purchase / Avg. creditors + Avg. bills payable
Option 3: Cash Purchase / Total Creditors
Option 4: None of the above
Answer (1)
25th Jan, 2024
Correct Answer: Net Credit purchase / Avg. creditors + Avg. bills payable
Solution : The formula for calculating Trade Payables Turnover Ratio is -
Net Credit purchase / (Avg. creditors + Avg. bills payable)
Hence the correct answer is option 2.
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